Hastings Star Company estimates that the amount of monthly salaries on which four weeks annual leave is payable is $83 200. What is the correct accounting entry to accrue annual leave at the end of the month?

Question

Quizplus · Accepted Answer

Accruing annual leave requires recognizing an expense and a liability. Therefore, the correct accounting entry is to debit Annual leave expense and credit Annual leave payable. Option A is incorrect because it debits the wrong account. Option C is incorrect because it reverses the debit and credit accounts. Option D is incorrect because accruing annual leave requires an accounting entry.

Hastings Star Company Estimates That the Amount of Monthly Salaries